Introducing Cryptocurrency ATMs
Counterintuitive as they may seem, crypto-ATMs are a real thing – and their numbers are growing around the world. North America has long been ground zero for the machines; it is home to 76% of the world’s cryptocurrency ATMs, with Canada hosting the first in 2013 and the United States housing over 1,500. Until now, most crypto ATMs allowed customers to purchase only Bitcoin, and there was no ability to sell coins. ATM manufacturers like Genesis Coin, CoinFlip, and General Bytes are looking to bring a variety of cryptocurrencies, as well as the ability to sell them, to the masses.
What is a Cryptocurrency ATM?
Cryptocurrency ATM is somewhat of a misnomer – the devices are actually internet-connected terminals that allow users to perform bitcoin-related transactions, as well as redeem bitcoin for cash. Another key difference from traditional ATMs is that they connect users to a cryptocurrency exchange, rather than a bank account. The goal is to facilitate easy trading access for on-the-go crypto holders, as well as providing a measure of liquidity to users.
Crypto ATMs make money by charging transaction rates – a company like CoinFlip charges 6.9% above prominent exchange Coinbase’s rate for buys, and 3.5% below that rate for sales. The average buy rate hovers around 8.8%. While these rates are higher than using a traditional exchange, crypto ATMs allow for instant transactions in cash; most exchanges have significant wait times to complete transactions.
The Future of Crypto ATMs
CoinFlip, founded in late 2015, is a cryptocurrency ATM manufacturer and distributor focused on, in the words of COO Benjamin Weiss, “[bringing] a physical aspect to something that is very abstract to people.” The company offers two unique features that might point a direction for the future of crypto ATMs: an option not just to buy but also to sell coins, and the ability to transact Ethereum and Litecoin in addition to Bitcoin.
CoinFlip has experienced rapid growth since 2016, and it is not coming from a single demographic. Weiss told Cryptoscoop, “…[our average user] is all over the map…from people who don’t have bank accounts and are using Bitcoin as their primary bank account, to people who are sending remittances to Mexico and other countries – because it is cheaper than traditional wire transfer services – to high net-worth individuals who don’t want to buy Bitcoin from their computers and would rather just get it easily with cash by going to an ATM.”
The variety of CoinFlip use cases illustrates a potentially bright future for cryptocurrency, with mainstream adoption perhaps not too far off. Increased access to digital currencies to help meet increased demand may help companies like CoinFlip realize their ultimate goal: a crypto ATM on every corner.
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